Crypto bros, rejoice: Coinbase is public.
The cryptocurrency exchange opened up for trading on the Nasdaq via the less-common direct listing route on Wednesday. But since shares started trading after 1 p.m. New York time, Coinbase (trading under the ticker “COIN”) had a bit of a bumpy ride.
The stock opened at $381 per share, far higher than Coinbase’s “reference price” of $250, a pseudo benchmark used for direct listings that’s often based on the company’s private market trading. (Though, an important note: The reference price is not like an IPO price, where shares are actually sold to early investors before opening to the public.) And as many experts predicted earlier this week, Coinbase’s trading was somewhat volatile.
The stock shot up to well over $420 per share at points throughout afternoon trading, before closing at $328 per share, about 14% lower than its opening price. On a fully-diluted basis, that still values Coinbase at roughly $86 billion in initial market cap, per CNBC.
But amid all the great expectations—and with the stock closing below its debut price—was Coinbase’s direct listing a first-day success?
According to analysts like Wedbush Securities’s Dan Ives, “Over the last six months, there have been lingering worries about what the appetite would be by the Street around crypto and Coinbase. I’d call it a home run success on the first day” for the company, Ives told Fortune.
Still, he says that “Obviously its success is not going to be just about one day, it’s how ultimately they execute.” Ives thinks Coinbase will need to prove their execution moving forward in order for the Street to “go all in.”
However it’s likely not everyone is feeling that success on Wednesday. Those like Matthew Kennedy, senior IPO market strategist at Renaissance Capital, say that while he thinks the day was a success for Coinbase and for “the crypto space in general,” for new investors who “bought the open, that’s a double digit loss in one day. Hardly a success,” he told Fortune. He notes that most investors will assume, however, that there’s a “great deal of risk buying a new listing like this on its first day.” But for the employees and insider shareholders who had the option to sell without a lockup period (as is the case with a direct listing versus an IPO), Kennedy thinks “they would call it a success.”
Coinbase’s trading volatility on its debut didn’t come as much of a surprise to Wall Street. Wedbush’s Ives notes that “anything related to Bitcoin is going to be a ‘Space Mountain’ ride for a stock.” Indeed, much like crypto itself, experts expect Coinbase’s stock to be a bit volatile moving forward, at least in the near term. After all, as Coinbase’s president and chief operating officer Emilie Choi told Fortune‘s Robert Hackett on Wednesday, “Anybody who wants to get into crypto … should be thinking about the long term. It’s just not for the faint of heart otherwise.”
As for investors watching Coinbase’s stock following its debut, Renaissance Capital’s Kennedy has a suggestion: “From looking at previous direct listings, these do take a few months to settle. It’s not a bad strategy to just wait and look for an attractive entry point.”